NON-QUALIFIED EMPLOYEE STOCK PURCHASE PLAN
The purpose of the Hyseq, Inc. Non-Qualified Employee Stock Purchase Plan is to provide eligible Employees
of Hyseq, Inc. and its Affiliates with an opportunity to acquire a proprietary interest in the Company through the
purchase of Common Stock of the Company on a payroll deduction basis. It is believed that participation in the
ownership of the Company will be to the mutual benefit of the eligible Employees and the Company. This Plan is
not intended to constitute an "employee stock purchase plan" within the meaning of Section 423 of the Internal
Revenue Code of 1986, as amended.
Unless otherwise specified or unless the context otherwise requires, the following terms, as used in this Plan, have
the following meanings. Wherever appropriate, words used in the singular shall be deemed to include the plural
and vice versa, and the masculine gender shall be deemed to include the feminine gender.
(a) ACCOUNT means the funds accumulated with respect to an Employee as a result of deductions from his
paycheck for the purpose of purchasing Common Stock under the Plan. The funds allocated to an Employee's
Account shall remain the property of the Employee at all times prior to the purchase of the Common Stock, but
may be commingled with the assets of the Company and used for general corporate purposes. No interest shall
be paid or accrued on any funds accumulated in the Accounts of Employees.
(b) AFFILIATE means a corporation, as defined in Section 424(f) of the Code, that is a parent or subsidiary of
the Company, direct or indirect.
(c) BOARD means the Board of Directors of the Company.
(d) CODE means the Internal Revenue Code of 1986, as amended.
(e) COMMITTEE means the committee to which the Board delegates the power to act under or pursuant to the
provisions of the Plan, or the Board if no committee is selected.
(f) COMMON STOCK means the shares of common stock of the Company, $.001 par va